Austerity hits hard

In an attempt to tackle the critical budget deficit problem, the government has begun to implement an austerity plan backed by the IMF.

The austerity measures have hit hard. In 2016, the Egyptian pound was floated, causing it to lose 50 percent of its value. Egyptians lost much of their spending power as a result.

Since the pound’s devaluation, subsequent energy subsidy cuts such as the one announced on Tuesday pushed inflation to critical levels.

Fuel subsidy cuts have raised the cost of living for Egyptians. Last month, rises in the price of the Cairo metro caused impromptu protests as commuters suddenly found a third of their wages being spent on travel.

Food subsidies, too, have been cut, angering the 70 million people relying on state handouts.

In May, demonstrations in Giza and Alexandria railed against the latest cuts in the bread subsidies, which hit the poorest Egyptians the hardest.

According to the Egyptian government, however, the measures are having some positive effects.

The planning ministry said last month that Egypt’s GDP growth for the 2017-2018 fiscal year’s third quarter rose to 5.4 percent from 4.3 percent in the corresponding period the previous year.